KUALA LUMPUR: The ringgit remained in a narrow trade and closed lower against the US dollar on Thursday, as heightened tensions in the Middle East weighed on market sentiment and supported the greenback.
At 6 pm, the ringgit eased to 3.9415/9480 versus the greenback from 3.9395/9465 at Wednesday’s close.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said global tensions surrounding the escalating conflict involving the United States, Israel and Iran remained high on traders' agenda, which affected sentiment negatively.
He noted that Bank Negara Malaysia (BNM) today decided to hold the Overnight Policy Rate (OPR) at 2.75 per cent but at the same time acknowledged the geopolitical risk emanating from the Iran war.
"What it means is that BNM is assessing the situation and the OPR should remain steady in the near term. That should be positive for the ringgit in the near term,” he told Bernama.
Earlier, the central bank said that at the current OPR level, the Monetary Policy Committee (MPC) considers the monetary policy stance to be appropriate and supportive of the economy amid price stability.
BNM also stated that the MPC will continue to monitor ongoing developments and assess the balance of risks surrounding the outlook for domestic growth and inflation.
At the close, the ringgit traded mostly lower against a basket of major currencies.
It strengthened versus the British pound to 5.2635/2722 from 5.2640/2733 yesterday, but fell against the euro to 4.5808/5884 from 4.5738/5819 at the last close and slipped vis-à-vis the Japanese yen to 2.5080/5124 from 2.5062/5108 previously.
The local note traded mixed against its ASEAN peers.
The ringgit appreciated vis-a-vis the Thai baht to 12.4711/5016 from 12.5246/5541 on Wednesday but slid versus the Singapore dollar to 3.0885/0938 from 3.0864/0921 yesterday.
It was flat against the Indonesian rupiah at 233.1/233.6 from 233.1/233.7 at the previous close and was unchanged versus the Philippine peso at 6.72/6.74. - Bernama
